That you posted this AC tells us everything we need to know about you.

Pam: Oh, OK, then good luck with all the biometric scanners. Unless you wanna cut off my fingers and scoop out my retinas.

Kidnappers look at each other.

Pam: Oh, don't be dicks!

"Web applications today are written as a poorly-coordinated mishmash of artifacts written in different languages, file formats, and technologies.

"...and here's another one!"

Laugh if you want, but if you yell MARY HAD A LITTLE LAMB at your rhododendrons, the NSA will know about it.

I would guess that one reasons that retailers are converting BTC to local currency immediately is that it is insanely volatile right now, so holding BTC comes with risk. If the value becomes more quiescent (say, on a par with the USD), and if the retailers can purchase their supplies from other retailers who also accept BTC, then direct re-spending of BTC would rise without the vendor going through an exchange first. Which would be ideal, since any exchange is going to skim a little off the top.

See, I also think cryptocurrencies in their present form have a good chance of failing, but for very different reasons:

1. The blockchain doesn't appear to scale well. It takes a long time to verify transactions, and we're hardly stressing BTC to reasonable levels. 1.2 million users is paltry compared to the population of the world. One would ideally need something like a BTC credit card, where actual transactions are mediated by insured banks that act as buffers, providing the illusion of "instantaneous" and "reversible" transactions for a fee that might be paid for by either card holders or merchants. The bank would then take on the risk of a transaction subsequently failing to verify, using typical means to go after the offending party to get the funds back.

2. It all goes south when the power's out. If there's a widespread blackout or communications outage, I can't use my BTC. I can use the bills in my wallet, or even trade the physical goods/services I have for the ones I need. Of course, you might say that credit/debit cards have the same problem, and increasingly that's what we use for daily purchases. If the computing infrastructure of the world were to collapse, I'd say we'd have bigger problems to deal with -- but I still like the idea of coins and paper money as a backup for temporary outages.

3. Properly securing a wallet is hard, and using a compromised wallet is easy. Have you seen what people do to print a secure paper wallet? Disconnecting the printer from the internet, etc.? Average Joes and Janes won't do it. And then access to that single number gives a thief access to however much money you've got in the wallet. Since some folks are storing tens of thousands of USD in wallets, thieves are highly motivated. Money has to be simple to use.

But all this is tangential to the original discussion: do we need special regulation of cryptocurrencies? To which I say, no. Like it or not, they're being widely used as currencies, moreso than the native currencies of certain island nations, so we might as well treat them as such. Now, they may be a bad implementation of a currency, but that's another topic entirely.

Hmm, I can't at all see where I "personally attacked you", although I do see you lashing out a lot. But that's ok, son... I ain't mad. :-)

It does seem like you're having a lot of problems convincing people on this thread. Maybe if you stated clearly why you think a cryptocurrency valued at 7.5 billion US$ isn't a real currency just because there's no government backing it, you might get some folks to see things your way. But saying things like "your argument is irrelevant" or "you can't debate facts" without telling us what facts you're talking about is just going to make those people grin and shake their heads.

Again, agreed. I think the reason people leap to the idea of "regulating" Bitcoin is that it has notoriously been used for shady purposes due to its effective untraceability (yes, you can find out that X BTC were transferred into wallet Y, but finding the real-world owner of Y can be difficult, and can be made even moreso).

But there may be other regulations in place regarding "currency" that pertain to banks and exchanges, and perhaps that is what the OP was thinking. But even so, I don't think we should have special rules for cryptocurrencies, any more than we should have special rules for Canadian dollars. If it's a popular medium of exchange, then it's a de facto "currency", Webster's be damned. And if it's a currency, we know how to deal with it.

The only one thing we can't do with BTC and its ilk is appeal to a central regulating authority, like a government. But given that a consortia of mining pools could collectively control >51% of BTC transactions and act as a regulating authority (deploying changes to the protocol where beneficial, etc.), that may not be infeasible.

Sure, agreed. But every time someone comes up with a "Bitcoin can't buy X" argument, someone else posts an article like this -- which was updated today:

http://www.coindesk.com/inform...

Again, I don't own or use Bitcoin or any other cryptocurrency, but I do appreciate the technology, and how its adoption has spread . And there are a lot of people who seem to be rooting for it to fail, although I can't quite understand why. Jealously at not being one of the early adopters? Fear of the unknown?

Oh, I'm sorry... I wouldn't have wasted all that time citing actual numbers if I'd realized that I was talking to the sole authority of facts related to economics! :-)

A wizard did it.

This is always the crux of the Great Bitcoin Debate. What counts as backing the worth of something?

A non-trivial amount of Bitcoins are "owned" by somewhere roughly between 500,000 and 1,200,000 people, depending on how you calculate the number (https://bitscan.com/bitnews/item/how-many-people-really-own-bitcoins-and-why-does-it-matter). They come from numerous countries across the globe. Any one of those countries could collapse, and in theory the BTC holders would remain solvent -- this is touted by the BTC community as one of its big pluses.

In contrast, let's look at some countries with their own currencies, which all have fewer "users" than BTC:

Tuvalu (http://en.wikipedia.org/wiki/Tuvalu):
- Population ~11,000.
- Native currency: Tuvaluan_dollar (http://en.wikipedia.org/wiki/Tuvaluan_dollar).
- GDP: ~37 million USD.

Barbados (http://en.wikipedia.org/wiki/Barbados)
- Population: ~278,000
- Native currency: Barbadian dollar (http://en.wikipedia.org/wiki/Barbadian_dollar)
- GDP: ~7 billion USD.

Maldives (http://en.wikipedia.org/wiki/Maldives):
- Population ~394,000.
- Native currency: Maldivian rufiyaa (http://en.wikipedia.org/wiki/Maldivian_rufiyaa)
- GDP: ~2.2 billion USD

I don't know how stable the Tuvaluan, Barbadian, and Maldivian economies are, but I'm pretty sure that the combined military might of these countries is no match for the military might of the countries whose citizens hold the majority of BTC's current equivalent of 7.7 billion USD.

(I don't own Bitcoins, BTW... I just think it's fun to watch this stuff unfold.)

That's been the debate about Bitcoin all along. The best answer is probably this: http://en.wikipedia.org/wiki/I...

With cash income, there's a paper trail - the IRS can look at pay stubs from your employer and look at bank statements to determine whether or not you are paying enough in taxes.

Actually, I think you mean, "with employer-declared or bank-mediated income, there's a paper trail." If I pay someone in small green pieces of paper to mow my lawn, and they keep it under their mattress until they need it, then there's no paper trail at all.

We are arguing exactly the same thing. I pointed out the three regulations that we most likely care about, and then I said:

So... can we just formally decree that cryptocoins meet the definition of a "currency", and be done with it? Otherwise I'm afraid that we'll be creating another legal (and patent) swamp where "...with Bitcoins" will become the new "...on the Internet".

I imagine that the sorts of things we'd want to regulate about "digital currencies" are the same things we'd want to regulate about any foreign or domestic currency; e.g.:

- You can't use it to pay for illegal goods or services
- You can't receive it in payment for illegal goods or services
- You can't use it to hide other transactions related to illegal goods or services (i.e., money laundering)

So... can we just formally decree that cryptocoins meet the definition of a "currency", and be done with it? Otherwise I'm afraid that we'll be creating another legal (and patent) swamp where "...with Bitcoins" will become the new "...on the Internet".